Texans salary cap FAQs with former agent Joel Corry

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I asked former sports agent Joel Corry (@corryjoel) some Texans salary cap questions you sent me on both Twitter (@StephStradley) and on Facebook. To know where he’s coming from, I asked him to share some about his background:

I’m a former agent that co-founded Premier Sports & Entertainment. I no longer represent players. A former colleague is Glover Quin’s agent. Some of the more notable clients I helped represent are Hall of Famer John Randle, ESPN analyst Eric Allen and Pro Bowl WRs Jimmy Smith and Keenan McCardell (Houston native). I currently write for the National Football Post and CBSSports.com primarily on salary cap and player contract issues.

The general description of the Texans going into 2014 is that they are in “cap trouble” and have been that way for a while. How are the Texans doing relative to the league and division? Or as bluntly asked by a Twitter follower, “Just how screwed are we?”

“There isn’t going to be a huge increase in the cap. NFL executives I’ve talked to are conservatively using $125M-$126M for internal projections. Some expect the cap to be set a little higher with $128M as the maximum. The Texans will lag behind some of the teams in the AFC South with close to $8.5M of cap room. This is before any contract restructures, releases & pay cuts. The Jaguars could have around $50M in cap room. The Colts could have close to $30M. The Raiders should have the most cap room at right around $60M.”

Looking at the salary distribution as a whole, is there anything odd about the Texans salary cap situation versus what most teams are facing going forward?

“When a team thinks it has a window of opportunity to win a Super Bowl, it’s hard to have an abundance of cap room. The Ravens had to make cap related roster moves in the off-season. The Steelers restructure contracts each year to comply with the cap. Texans fans should be grateful that the cap isn’t managed like in Dallas. They have almost $150M in 2014 cap obligations. (Steph note: So in sum, the Texans salary cap situation isn’t awesome but at least it’s not as bleeped as the Cowboys).”

“Schaub has a $14.5M cap number in 2014. Since there isn’t any guaranteed money left in the deal, releasing Schaub won’t have adverse cap consequences. There are two options. If the Texans take his full cap hit in 2014, he’ll count $10.5M on the cap (that’s called dead money-a cap charge for a player no longer on the roster). The Texans pick up $4M of cap room this way. The other option is releasing Schaub with post-June 1 treatment. The Texans could wait to release Schaub after June 1 to take his cap hit over two years. He would count $3.5M on the cap in 2014 & $7M in 2015 because of signing bonus proration from his 2015 & 2016 contract years. They can also release him prior to June 1 with a Post-June 1 designation. His $11M salary & $14.5M cap number would remain on the books until June 2 & the cap hit would be taken over two years as described above.”

“My understanding is the Texans never made Glover Quin a concrete offer. He wanted to stay with the Texans on a deal comparable to Danieal Manning’s ($9M guaranteed/$5M per year/4 years). Quin signed with Detroit for $4.7M per year. The cap numbers in the first two years of Manning’s deal, which have been a template for Quin’s contract, are comparable to the cap numbers in the first two years of the deal Ed Reed signed.

Reed is counting $2,666,668 in dead money in 2014 for Houston. There will a cap credit in the amount of his Jets salary ($387,059 if Reed isn’t cut) since his 2013 base salary was fully guaranteed by the Texans with an offset. In addition to being 7.5 years younger than Reed (Quin is 27), re-signing Quin would have allowed the Texans to use their 2nd round pick on another position instead of drafting D.J. Swearinger.”

Texans fans disagree on a lot of things. What they all agree on is feeling terrible for what this season does for Andre Johnson. I understand that due to cap reasons alone, he is basically untradeable. Is this correct, and why?

“The Texans would have almost $12M in dead money with an Andre Johnson trade. His 2014 cap number is a little over $12M right now but he has a $3.5M salary escalator that he’ll likely earn or most of it to raise the number to the $15.5M neighborhood. Although Johnson is having a great season, I don’t know if the Texans could get true value for him in a trade because he’ll be 33 next year with 3 years/$34.5M left on his contract (assuming he earns the entire escalator).”

Sometimes, the way that NFL contracts work, it isn’t really worth cutting/trading a player to get cap savings. (I’m thinking Arian Foster) Who would be the best candidates for the biggest cuts for cap savings? And who would be worst candidates for that? Given the timing, nature of the contracts, are there any particularly candidates for a trade?

“Arian Foster is an interesting one. The back injury makes him untradeable. He’s been a high mileage RB since becoming the starter so I would explore releasing him and re-signing Ben Tate to a long term deal. Tate should have more longevity & will be cheaper. Foster’s 2014 cap number is $8.75M. The Texans would pick up $1.25M in cap room by cutting him where there would be a $7.5M cap charge from his 2014-2016 signing bonus proration. I can’t see Tate back with Texans if Foster is around after he voiced his displeasure earlier in the season about being a complementary RB.

The Texans pick up $1.25M of cap room if Foster’s cap hit is taken this year. With Post-June 1 treatment, he counts $2.5M in ’14 & $5M in ’15.

I’m only advocating his release if Tate signs a long term deal. Steven Jackson & Reggie Bush at $4M per year set the RB market this year in free agency. Tate could be a victim of RBs being devalued. He may not get a Michael Turner type deal on the open market ($5.75M per year/$15M guaranteed). Turner was in a similar situation as Tate. He had been a complementary back to LaDainian Tomlinson when he became a free agent in 2008.”

There’s various sites with different info on the contracts for J.J. Watt and Kareem Jackson. What is the status of their contracts currently, and what will have to happen to be able to re-sign them?

“J.J. Watt is finishing the 3rd year of a 4-year rookie deal. The 2011 draft class will be eligible for to sign new deals after the season ends. He makes $1,907,385 next year. The Texans have an option for a 5th year that must be exercised by early May since he was a 1st round pick. It’s no brainer that the Texans will pick up the fifth year. As the 11th pick, Watt’s fifth year salary will be the average of the 3rd-25th highest paid players at his primary position, DE.

Since teams haven’t dealt with the 5th year option before, it remains to be seen how they will treat that year in contract negotiations. Players like Watt don’t come around very often. Unless he is willing to give the Texans a hometown discount, his next contract could exceed Mario Williams’ deal ($16M per year/$50M in guarantees). Kareem Jackson is under contract through the 2014 season. The cap may preclude a contract extension. It could become a choice between releasing Jonathan Joseph ($12.25M 2015 cap number) and signing Jackson to a new deal as his free agency approaches.”

Bob McNair characterized the Texans as not being in rebuilding mode. Some people think that means he wants to obtain an experienced quarterback to add to the team. Would acquiring a player like Jay Cutler (not my idea BTW) be feasible with the Texans situation, and would the opportunity costs be?

“The Texans could potentially have a turnaround like the KC Chiefs. Obviously, the QB situation must be solved. Brian Cushing staying healthy is a key defensively. If the draft order stays the same, the Texans pick first, which gives them flexibility. They could try to get a team to bite on an RGIII package for the rights to take Teddy Bridgewater if they’re not sold on him as a franchise QB. Assuming the Bears don’t use their franchise tag on Jay Cutler, I don’t think he is a viable option. Some team that doesn’t like the QB draft class will likely be desperate enough to give him at least Tony Romo money ($18M per year/$55M in guarantees).”

Since the new CBA reduced rookie salaries, how does a 1-3 pick compare salary-wise to how it was pre-CBA? (Folks wanting to know if new CBA is too punitive if you get top pick wrong).

“Rookie salaries were scaled back tremendously in the new CBA. Having a top three pick was a blessing and curse. Sam Bradford got $50M guaranteed before proving himself on a deal with a base value of $78M over 6 years as the first pick in 2010. Eric Fisher’s deal this year is a slightly more than $22M over 4 years (fully guaranteed) as the number one pick.

I wrote an article before the season started that projected the deals of the top 3 picks if the rookie wage scale didn’t exist. Fisher’s deal probably would have been around $70M/5 years (worth up to $77.5M) with over $50M guaranteed (see link below). It’s much easier to trade first round picks with the current system because the salaries are much lower. The RG3 trade may not have taken place under the old system. The Colts wouldn’t have traded for Trent Richardson if he had a 5-year deal with a base value of $60M that could max out at close to $70M as projected under the previous rookie salary system.

Are there projections for the salary cap to go up in the near future?

“Usually with a new TV deal, there is a big jump in the cap. Based on conversations with NFL executives, that’s not going to be the case this time around. The cap will start going up but the increases will be phased in more gradually. Also, money was taken from future years in 2012 to prevent the cap from going down. That must also be factored into the equation with cap increases.”

Please thank Joel Corry for his time putting this together.

For me, this next offseason will be an interesting test to see if the Texans will take some significant cap medicine and who ends up going. They tried to system their way through a Super Bowl window, and spent to the cap and failed. Do they take a bunch of dead cap hits in the off-season, or do they do just a little bit with the belief that they aren’t rebuilding?